ASX public consultations and policy submissions to government

Today’s publication of the “ASX Market Management Consultation 2: Potential Enhancements” is the second in a sequence of three consultations that the ASX will be undertaking following ASIC’s expectations of market operators set out in ASIC’s Report 708.

Following the feedback received during the first consultation, which primarily focussed upon existing procedures and current capabilities during incidents, this second consultation will outline and provide technical details for potential future enhancements to these procedures and capabilities. 

The ASX is seeking stakeholder feedback across the following four proposals:

• A new order download service (ODS).
• A new trade download service (TDS).
• A ‘cancel only’ session state.
• An Intraday restart capability.

The final section of this second consultation will detail ASX’s policies for disabling certain market components, as set out by ASIC’s Rep 708 Expectation 6. Note: ASX is not seeking feedback on this section, and it is tabled in this document as a technical reference only.

As part of ASX’s ongoing commitment to work with all stakeholders during this consultation, we will again, conduct a range of group and one-on-one meetings over the next six weeks.

Both ASX and ASIC encourage all stakeholders to engage during this consultation. Submissions can be emailed to consultations@asx.com.au and are welcome up to close of business Friday 9th December 2022.

For any questions or to arrange a meeting, please contact:

• Rob Nash on +61 2 9227 0032 or 
• Ben Jackson on +61 2 9227 0897    

On 19 October, ASX released a response paper summarising and responding to the feedback from the 28 June 2022 consultation paper on ASX Market Management. The paper includes the proposed actions ASX will take following the consultation.

The Market Management consultation was the first of three ASX consultations in response to the Australian Securities and Investments Commission’s (ASIC) Report 708 - ‘ASIC’s expectation for industry in responding to a market outage’ (REP 708).

The consultation sought feedback on the following topics:

1. certainty about trade and order status
2. the application of session states (e.g. Enquire and Adjust)
3. intraday checkpoints and a final cut-off time
4. incident communications with the market during disruptions
5. dependencies.

ASX received 19 written responses from a broad range of stakeholders including participants (11), industry bodies (3), vendors (2), wholesale investors (1), a share registry (1) and a market operator (1).

ASX would like to thank the many stakeholders who participated in meetings and the respondents who provided written feedback.  

Today ASX released a response paper to the December 6 2021 consultation paper on proposed changes to the ASX Trade Cancellation Ranges: Proposals for Change to ETO cancellation ranges and QCR Process.

Ten written submissions were received in response to the consultation and ASX would like to thank those who have provided feedback.

Today ASX released a response paper to the December 6 2021 consultation paper on proposed changes to the ASX 24 Cancellation Ranges: Proposals for Change to Energy Products and QCR Process.

Six written submissions were received in response to the consultation and ASX would like to thank those who have provided feedback.

On 29 August 2022, ASX released its response to consultation on the changes it proposed in February 2022 to the ASX Recovery Rules and Handbook to allocate US settlement bank investment losses between the ASX CCPs and their clearing participants. The response sets out the two revisions ASX intends to make to its loss allocation principles in response to the feedback received. It also summarises the key themes from the consultation process and ASX’s reply.

ASX received five written submissions in response to its consultation paper from two industry bodies and three clearing participants.

On 30 June 2022, ASX released its response to consultation feedback received on the August 2021 CHESS Replacement Tranche 3 and Combined Rule Amendments Consultation Paper.

ASX received 8 written submissions in response to its consultation paper, five of which were provided on a confidential basis. The submissions provided on a non-confidential basis are available at the links below:

• AFMA
• SAFAA
• Computershare

On 28 June 2022, ASX released a Consultation Paper on Market Management.

This consultation paper follows a review of actions taken by the ASX during technical issues or outages.   The Australian Securities and Investments Commission (ASIC) published ASIC’s expectations for industry in responding to a market outage (Report 708).  The report sets out ASIC’s ‘expectations to support the resilience and robustness of the Australian equity market’ that are applicable to market operators, market participants, and large institutional investors.

ASX is committed to working closely with our regulators, technology providers, independent experts, industry associations and customers to strengthen the resiliency and robustness of all the markets we operate, and to address the expectations listed in ASIC’s report about the equity market specifically.

A key part of this commitment is a sequence of three market consultations on aspects of ASX’s management of the equity market.  These are expected to be conducted in June, September and December 2022.

• June 2022 (this consultation): Broadly assesses the current position and considers refinements and improvements based on current capabilities.
• September 2022: Will request stakeholder input on potential future capabilities.
• December 2022: Will request stakeholder feedback on participant testing needs, including changes arising from the first and second consultations.

This first market consultation (June 2022) provides transparency on ASX’s existing market management procedures and how they are applied, and invites feedback on current practices based on the following four areas:

1. Certainty about orders and trades during an outage
2. Market session states (including Enquire and Adjust modes)
3. Approach, frequency and content of communications
4. Intraday checkpoints and cut-off times.

Written submissions should be made by 23 July 2022.

On 8th June 2022, ASX released a consultation paper on the fallback language to be applied to the Australian and New Zealand 90 Day Bank Bill Futures in the event of permanent cessation of the 3 month BBSW and/or BKBM benchmark. The consultation requests feedback on:

• Proposed fallback language to be included in the ASX 24 Operating Rules and Procedures; and
• Alternative fallback rates currently available and the level of detail participants require regarding the fallback rate and calculation ahead of any permanent cessation event.

The proposed changes are in line with global benchmark reform and best practice guidance issued by regulators worldwide to include fallback language in all contractual arrangements.

Written submissions in response to the consultation paper are requested by Wednesday 6th July 2022.

On 1 June 2022, ASX released its response to submissions received on the March 2022 Discussion Paper - Issuer Services: New Pricing. The changes proposed in the paper were relevant to any issuer of approved financial products that uses or will use ASX Issuer Services.

The response summarises the key themes from the consultation process and ASX’s reply. The paper also sets out the confirmed changes and effective date of 1 July 2022.

ASX received 9 submissions in response to the Discussion Paper, with 3 provided on a confidential basis. The submissions provided on a non-confidential basis are available at the links below:

• AFMA
• AIRA
• Computershare
• GIA
• NSX
• Stephen Dear

On 26 April 2022, ASX released a consultation paper entitled Enhancing the ASX Investment Products Offering.

The consultation paper is phase one of a two-stage consultation process intended to ensure that ASX’s investment product offering is supported by a clear and consistent rule framework that safeguards the interests of investors, while at the same time providing issuers with the flexibility to innovate and bring new products to market, and without imposing undue compliance costs or burdens.

ASX’s investment product offering currently comprises the following product sets regulated by three different rule books:

• exchange traded funds (ETFs), managed funds and structured products quoted on ASX under schedule 10A of the ASX Operating Rules
• listed investment companies (LICs), listed investment trusts (LITs), real estate investment trusts (REITs) and infrastructure funds listed and quoted on ASX under the ASX Listing Rules, and
• warrants quoted on ASX under schedule 10 of the ASX Operating Rules.

ASX can see merit in bringing these different rules into closer alignment for the benefit of both investors and issuers.

The consultation paper seeks submissions from all interested stakeholders on a range of policy issues relevant to achieving this outcome, including:

• admission requirements and processes
• product names
• investment mandates
• permitted investments
• portfolio disclosure
• management agreements
• management fees and costs
• performance reporting
• liquidity support
• the mFund Settlement Service, and
• improving the information available to investors about investment products.

To assist stakeholders in making a submission, ASX has prepared a separate submission form listing all of the questions in the consultation paper and providing a space for responses to those questions. The submission form can be downloaded here.

After considering the submissions it receives on the policy issues raised in the phase one consultation paper, ASX will proceed to draft proposed changes to its rules, procedures and guidance for investment products.

Phase two of the consultation will then seek feedback on the specific changes proposed to ASX’s rules, procedures and guidance for investment products. The consultation paper for phase two is likely to issue in early 2023.

Subject to the receipt of the necessary regulatory approvals, it is envisaged that the final changes to ASX’s rules, procedures and guidance for investment products will be released in mid-late 2023, with a view to them coming into effect no earlier than 1 January 2024.

Stakeholders who wish to make a submission on the phase one consultation paper are asked to do so in writing by the close of business on Friday 24 June 2022.

On 5 April 2022, ASX released a consultation paper entitled Proposed enhancements to the ASX Listing Rules: Continually improving the reputation and integrity of the ASX market.

The consultation paper seeks feedback from stakeholders on proposed enhancements to the ASX Listing Rules dealing with:

• the issuance of securities by listed entities, including the rules relating to security purchase plans (SPPs), pro rata issues and material placements
• the financial reporting framework for listed entities
•  the admission of an entity to the official list and the quotation of its securities
•  transactions by listed entities with persons in a position of influence
• the lodgment of documents by listed entities with ASX for release to the market, and
• other miscellaneous matters.

Stakeholders interested in making a submission on the consultation paper are asked to do so in writing by the close of business on Friday 27 May 2022.

ASX will consider all submissions it receives in response to the consultation paper before finalising the proposed rule amendments with ASIC.

Subject to the receipt of the necessary regulatory approvals, it is envisaged that the final rule amendments will be released in the third quarter of 2022 and take effect on 1 December 2022.

On 21 March 2022,  ASX released a consultation paper outlining proposed changes to the ASX Clear (Futures) OTC Rules and Handbook to:

• implement benchmark fallback rate provisions in relation to the OTC interest rate derivatives products cleared by ASX; and
• introduce OTC product enhancements to support the Actual/Actual ICMA Day Count Convention for the clearing of Assets Swaps and the IMM AUD roll convention, the industry convention to enable swaps to roll on ASX’s bank bill futures dates.  

Written submissions are requested by Friday 29 April 2022.

On 3 March 2022, ASX released the Discussion Paper Issuer Services: New Pricing. The changes proposed in the paper are relevant to any issuer of approved financial products that uses or will use ASX’s Issuer Services. The changes do not relate to listing fees.

ASX welcomes feedback from issuers on the pricing changes outlined in the paper.

Written submissions are requested by Thursday 14 April 2022.

On 11 February 2022, ASX released a consultation paper outlining proposed changes to the ASX Recovery Rules and Handbook that relate to the allocation of US settlement bank investment losses between the ASX CCPs and their clearing participants

ASX seeks feedback from clearing participants in relation to ASX’s proposal to allocate USD settlement bank investment losses in excess of $75m between ASX Clear (Futures) ( ASXCLF) clearing participants based on principles of mutualisation and potential and actual user pays. While all ASXCLF clearing participants will be exposed to a US settlement bank loss, those clearing participants that are in scope for overnight margining, and those clearing participants who have also paid USD funds to ASXCLF in the prior default fund commitment period will each bear a greater proportion of any loss.

Written submissions in response to the consultation paper are requested by Friday 25 March 2022.

On 1 February 2022, ASX Limited (“ASX”) released a consultation paper entitled Proposed ASX rule amendments to facilitate the listing of CCIVs and certain other collective investment vehicles on the ASX market and the quotation of their products on the ASX AQUA market.

The consultation paper seeks feedback on changes ASX is proposing to:

• the ASX Listing Rules to facilitate the listing on the ASX market of:
  • CCIV sub-funds
  • notified foreign passport funds (“NFPFs”) and
  • NZ registered managed investment schemes making a recognised offer of securities under Chapter 8 of the Corporations Act (“recognised NZ schemes”), and
• the ASX Operating Rules to facilitate the admission of products issued by the entities listed above to trading status on the ASX Quoted Assets (“AQUA”) market or for settlement through the ASX Managed Funds Settlement Service (“mFund”).

By way of background, a CCIV (short for “Corporate Collective Investment Vehicle”) is a new type of funds management vehicle to be introduced by the Corporate Collective Investment Vehicle Framework and Other Measures Bill 2021 that will operate via one or more sub-funds. The target date for the implementation of that Bill is currently 1 July 2022. ASX wants to be able to offer CCIV sub-funds access to the distribution available on the ASX and AQUA market platforms and to offer investors access via the ASX and AQUA markets to the investment opportunities that CCIV sub-funds will provide. To do this requires changes to the ASX Listing Rules and the ASX Operating Rules.

As further background, NFPFs have the benefit of the Asia Region Funds Passport mutual recognition arrangements set out in Chapter 8A of the Corporations Act and explained further in ASIC Regulatory Guide 138 Foreign Passport Funds. Recognised NZ schemes have the benefit of the mutual recognition arrangements set out in Chapter 8 of the Corporations Act and explained further in ASIC Regulatory Guide 190 Offering financial products in New Zealand and Australia under mutual recognition. Currently, however, ASX’s rules do not specifically cater for the listing of NFPFs or recognised NZ schemes or for the admission of their products as AQUA products, a situation which ASX is also seeking to rectify via this consultation.

ASX’s proposed rule changes will therefore be of particular interest to entities in the funds management industry and to industry groups and advisers representing those entities.

Due to the structure of CCIVs and their sub-funds, however, some significant rationalisation is required to the Listing Rules that refer to, or draw a distinction between, listed companies and listed trusts so that they appropriately apply where the listed entity is a CCIV sub-fund, which has no legal personality and is neither a company nor a trust. These broader changes to the Listing Rules will be of interest to all listed entities and their advisers.

Stakeholders interested in making a submission on the consultation paper are asked to do so in writing by the close of business on Friday 18 March 2022.

ASX will consider all submissions it receives in response to this consultation before finalising the proposed rule amendments.

Subject to the receipt of the necessary regulatory approvals, ASX is aiming to have the amended rules in force on, or as soon as practicable after, 1 July 2022, the Government’s target date for the introduction of its CCIV legislation.

On 17 January 2022, ASX released its response to consultation on the October 2020 proposed changes to capital requirements for ASX Clear Participants. The response to consultation paper includes an outline of the draft rule amendments to give effect to the recalibrated proposal.

ASX received seven written submissions in response to its consultation paper, with six provided on a confidential basis. The submission provided on a non-confidential basis is available at the link below:

• AFMA

On 6 December 2021, ASX released the consultation paper ASX Trade Cancellation Ranges: Proposals for Changes to ETO cancellation ranges and QCR Process

In summary ASX will be looking for feedback on:

• Cancellation ranges that are currently prescribed under section 3200 of the ASX Operating Rules Procedures for Exchange Traded Option products
• The consent time for Qualifying Cancellation Range (QCR) across all ASX Trade products being extended from 5 minutes to 10 minutes
• The timing for requests to cancel and re-price Tailor Made Combinations (TMC’s) be incorporated into the current timeframes used for Request for Cancellation in Operating Rule Procedure 3200
• Any additional aspects of the Cancellation Process that Participants are looking to raise with ASX

ASX invites submissions on the questions set out in this paper as well as any alternative approaches that market users may wish to raise for consideration. ASX welcomes feedback on the individual questions and in combination.

Written submissions are requested by Friday 18 February 2022

On 6 December 2021, ASX released the consultation paper ASX 24 Cancellation Ranges: Proposals for Change to Energy Products and QCR Process

In summary ASX will be looking for feedback on:

• Cancellation ranges that are currently prescribed under section 3200.9 of the ASX 24 Operating Rules Procedures in the Electricity Market Base Load Cap products
• The consent time for QCR across all ASX 24 products moving from 5 minutes to 10 minutes
•  Any additional aspects of the Cancellation Process that Participants are looking to raise with ASX

ASX invites submissions on the options set out in this paper as well as any alternative approaches that market users may wish to raise for consideration. ASX welcomes feedback on the options individually and in combination.

Written submissions are requested by Friday 18 February 2022

On 22 October 2021, ASX released its response to the submissions it received on its consultation paper dated 16 April 2021 entitled Proposed changes to the oil and gas reporting requirements in the ASX Listing Rules.

The consultation paper proposed changes to the reporting requirements for oil and gas entities to reflect and give effect to July 2018 revisions to the Petroleum Resources Management System sponsored by the Society of Petroleum Engineers, the American Association of Petroleum Geologists, the World Petroleum Council and the Society of Petroleum Evaluation Engineers (commonly referred to as the “SPE-PRMS”).

The consultation response includes a mark-up of the final changes ASX is proposing to make to the ASX listing rules addressing the feedback received in consultation submissions (see Annexure B in the consultation response), together with a mark-up comparing the final rule changes to the consultation version (see Annexure C in the consultation response).

Subject to the receipt of the necessary regulatory approvals, the final rule changes will come into effect on 1 July 2022. Listed entities are encouraged to early-adopt the changes, if they wish to.

ASX will issue an update to Guidance Note 32 Reporting on Oil and Gas Activities well before the transition date of 1 July 2022 reflecting the final changes to the Listing Rules and addressing some of the issues raised in the consultation submissions.

Consultation submissions

ASX received 17 written submissions in response to its consultation paper, with eight provided on a confidential basis. The submissions provided on a non-confidential basis are available at the links below:

• AMPLA
• Beach Energy
• BHP Petroleum
• Invictus Energy
• Molyneux Advisors
• PESA
  
• Petrosedex
• Vizier Energy
• Winchester Energy

On 31 August 2021, ASX released a consultation paper on the third of three tranches of operating rule amendments required to facilitate the implementation of the new system that will replace CHESS, together with the combined package of rule amendments across those three tranches. 

The amendments in tranche 3 relate to netting, settlement, reporting and miscellaneous amendments for ‘Day 1’ implementation of the new system, including as revised to reflect changes to netting and settlement workflows as consulted on in 2021. As part of the miscellaneous amendments, they also include transitional rules addressing migration aspects for the cutover to the new system.

The consultation paper invites feedback from users and other stakeholders on the operation of the draft tranche 3 rule amendments, including any unintended consequences, as well as the combined package of rule amendments.

Written submissions are requested by Tuesday 14 December 2021.

On 27 July 2021,  ASX released a consultation paper outlining proposed changes to the ASX Clear (Futures) Operating Rules and Procedures to:

• replace the 2006 ISDA Interest Rate Derivatives Definitions with the new 2021 ISDA Interest Rate Derivatives Definitions as the standard definitions for cleared interest rate swaps from 4 October 2021; and
• clarify the existing position that ASX Clear (Futures) owns cash and securities provided to it by Clearing Participants as margin, commitment or excess deposits and provides an express power for ASX Clear (Futures) to re-hypothecate non-cash collateral of a defaulting participant

Written submissions are requested by Wednesday 25 August 2021.

On 30 June 2021, ASX published its response to consultation feedback from the 18 February 2021 consultation paper on changes to netting and settlement workflows to ensure the new system is sufficiently resilient to withstand record trading volumes like those experienced during March 2020. 

The response sets out the confirmed solution design including the revisions ASX has made in response to the feedback received.  It also summarises the key themes from the consultation process and ASX’s reply. 

ASX received submissions from 30 organisations as part of the consultation. 

On 5 May 2021, ASX released a Consultation Response in relation to its 30 November 2020 consultation paper on proposed amendments to the ASX Clear Operating Rules and Procedures and ASX Clear Operating Rules Guidance Note 12 Trust and Client Segregated Accounts.

Based on the feedback received, ASX intends to remove the proposed changes to the nominated time and audit requirement.

On 21 April 2021, ASX released its response Default Management Rule Changes to submissions on ASX’s consultation paper proposing changes to the ASX Clear (Futures) Operating Rules and Procedures that relate to the default management of exchange-traded derivatives. ASX received six written submissions in response to the consultation paper, four of which were provided on a confidential basis.  The submissions that were provided on a non-confidential basis are available at the links below: 

• FIA
• HSBC

Based on the feedback received, ASX intends to make minor changes to the proposal outlined in the consultation paper in order to address the hedging of the defaulter’s portfolio and the possible inclusion of such hedges in the auction portfolio.

On 16 April 2021, ASX released a consultation paper entitled Proposed changes to the oil and gas reporting requirements in the ASX Listing Rules.

The reporting requirements for oil and gas production and exploration activities in Chapter 5 of the ASX Listing Rules are currently built upon the 2007 edition of the Petroleum Resources Management System sponsored by the Society of Petroleum Engineers, the American Association of Petroleum Geologists, the World Petroleum Council and the Society of Petroleum Evaluation Engineers (commonly referred to as the “SPE-PRMS”).

The SPE-PRMS was revised by its sponsors in July 2018. The consultation paper proposes changes to Chapter 5 of the Listing Rules to reflect and give effect to those revisions.

Stakeholders interested in making a submission on the consultation paper are asked to do so in writing by the close of business on Friday 28 May 2021.

On 24 March 2021, ASX Limited (“ASX”) released a detailed Consultation Response to its 30 November 2020 consultation paper Proposed Listing Rules changes: online forms, notification of security issues and corporate action timetables.

The Consultation Response outlines a number of amendments to the Listing Rules (“LR”) that will come into effect on 5 June 2021 (or such later date as ASX may notify). The amendments include:

• changes to the timetables for seeking the quotation of securities in LR 2.8;
• changes to the buy-back notification requirements in LR 3.8A;
• changes to the notification requirements for issues, conversions and cancellations of securities, and for payment of calls, instalments and other amounts on partly paid securities, in LR 3.10.3 – 3.10.3E;
• changes to LR 3.21 and 3.22 imposing some additional notification requirements around the cancellation, deferral or reduction of previously announced dividends, distributions or interest payments;
• clarificatory changes to the definition of “employee incentive plan” in LR 19.12; and
• changes to the timetables for corporate actions in Appendices 6A and 7A, in particular to allow an additional 2 business days for an entity to announce the results of certain corporate actions.

The Consultation Response is accompanied by the following annexures:

A.      the final changes ASX is making to the Listing Rules addressing the feedback received in consultation submissions;

B.      a mark-up comparing the final rule changes to the consultation version;

and the final versions of the following new or amended Listing Rule Appendices:

C.      Appendix 2A Application for quotation of securities;

D.      Appendix 3A.1 Notification of dividend/distribution;

E.      Appendix 3A.2 Notification of interest payment & interest rate change;

F.      Appendix 3A.5 Notification of return of capital by way of in specie distribution of securities in another entity;

G.      Appendix 3A.6 Notification of call/instalment on quoted partly paid equity securities;

H.      Appendix 3B Announcement of proposed issue of securities;

I.        Appendix 3C Notification of buy-back;

J.       Appendix 3G Notification of issue, conversion or payment up of unquoted equity securities; and

K.      Appendix 3H Notification of cessation of securities.

On 26 February 2021, ASX released a Review of Legal Terms for the ASX Trade Acceptance Service and related Product Services (referred to collectively as the TAS). 

The Legal Terms commenced on 31 October 2016, with a term of five years - due to expire on 31 October 2021. The Legal Terms provide that a review be commenced 12 months prior to the expiry of the Legal Terms and that the review be published within four months of its commencement.

The Review has not identified a need for significant changes to the Legal Terms. Accordingly the TAS will continue to be made available on substantially the same terms for another five years, with effect from 31 October 2021. The proposed changes to the Legal Terms identified through the Review are explained in the Review paper. Attachments A and B to the Review paper set out in mark-up the proposed changes to the Legal Terms.

The Legal Terms will also be reviewed and updated in conjunction with the replacement of the existing CHESS system prior to the expiry of that term

On 18 February 2021, ASX released its consultation paper on CHESS Replacement: Proposed changes to netting and settlement workflow. The consultation paper outlines proposed changes to the design of both the netting and settlement confirmation workflows to deliver processing efficiencies and reduce subsequent messaging volumes as part of the overnight end-of-day process and daily batch settlement.

The proposed changes will allow the CHESS replacement system to support clearing and settlement of significantly greater trading volumes and are largely in response to the extreme record trading activity in March 2020, which redefined the Day 1 capacity requirements of the replacement system. 

The consultation period closed on 18 March 2021.

On 30 November 2020, ASX released a consultation paper on proposed amendments to the ASX Clear Operating Rules and Procedures and ASX Clear Operating Rules Guidance Note 12 Trust and Client Segregated Accounts to provide an improved framework and additional guidance to assist participants to comply with their client money obligations.

ASX received twelve submissions in response to its consultation paper, all but three of which were expressed to be confidential. The submissions that were provided on a non-confidential basis are available at the links below:

• AFMA
• Baillieu
• Chi-X

On 30 November 2020, ASX Limited (“ASX”) released a consultation paper entitled Proposed Listing Rules changes: online forms, notification of security issues and corporate action timetables. The consultation paper is accompanied by the following annexures:

A.      Proposed amendments to the Listing Rules;

B.      Proposed amendments to Appendix 2A Application for quotation of securities;

C.      Proposed amendments to Appendix 3A.1 Notification of dividend/distribution;

D.      Proposed amendments to Appendix 3A.2 Notification of interest payment & interest rate change;

E.      Proposed amendments to Appendix 3A.5 Notification of return of capital by way of in specie distribution of securities in another entity;

F.      Proposed amendments to Appendix 3B Announcement of proposed issue of securities;

G.      Proposed new Appendix 3C Notification of buy-back;

H.      Proposed amendments to Appendix 3G Notification of issue, conversion or payment up of equity securities; and

I.        Proposed new Appendix 3H Notification of cessation of securities.

The proposed Listing Rule changes are primarily intended to facilitate the introduction and operation of the next round of new and updated online forms ASX will be releasing in the New Year (being the different forms mentioned in B – I above).

ASX is also taking the opportunity to propose:

• changes to the rules dealing with notifications of security issues in Listing Rules 3.10.3 – 3.10.3D to make them clearer and easier to follow;
• amendments to Listing Rules 3.21 and 3.22 and a new Listing Rule 12.13 addressing the cancellation or deferral of previously announced dividends, distributions and interest payments;
• an amendment to Listing Rule 2.8.3 to reduce the deadline for applying for quotation of securities issued as a consequence of the conversion of unquoted convertible securities from 10 business days to 5 business days;
• clarificatory amendments to the definition of “employee incentive plan” in Listing Rule 19.12; and
• changes to the timetables for corporate actions in Appendices 6A and 7A, in particular to allow an additional 2 business days for an entity to announce the results of certain corporate actions.

Submissions closed on Thursday 24 December 2020. ASX received the following non-confidential submissions in response to the consultation paper:

• Boardroom
  
• Computershare
• CSL
• Governance Institute of Australia
• Herbert Smith Freehills
• King & Wood Mallesons
• Law Council of Australia
• Link Group
• Thomson Reuters

On 28 October 2020, ASX released its response to consultation feedback received on the June 2020 CHESS Replacement: Revised Implementation Timetable Consultation Paper. This response provides a summary of the feedback received, the key factors driving the project extension and the confirmed implementation schedule for CHESS replacement.

ASX received feedback from 100 organisations who responded to the consultation. The replanning process involved detailed discussions with our technology partners, the completion of a comprehensive project review and engagement with the regulatory agencies.

On 14 October 2020, ASX released a consultation paper which outlines a proposed consolidation of the two capital measures that non-bank ASX Clear participants are currently required to maintain as per Schedule 1 of the ASX Clear Operating Rules, into a single capital measure. 

ASX seeks feedback on the proposed single capital measure, as well as on draft miscellaneous rule amendments which has been included to ensure currency and accuracy of references.

Written submissions are requested by Monday, 30 November 2020.

On 24 September 2020, ASX released its response to consultation feedback received on the February 2020 CHESS Replacement Tranche 2 Rule Amendments Consultation Paper.

ASX received 11 written submissions in response to its consultation paper, eight of which were provided on a confidential basis. The submissions provided on a non-confidential basis are available at the links below:

• Sydney Stock Exchange
• SAFAA
• Computershare

As part of its June consultation on the revised implementation timetable for CHESS replacement, ASX sought feedback from users on the timing of its proposed further rules consultation covering both the tranche 3 rule amendments and a consolidated rules package across all rule amendments required to implement the new system. The market will be updated on the timing for the further rules consultation in ASX’s response to consultation feedback on the revised implementation timeline.

On the 27th of July 2020, ASX released its consultation paper on proposed changes to the BBSW methodology. The objective of the changes are to increase the frequency with which BBSW rates are calculated using transaction data, while ensuring that a high quality rate is produced. The proposed enhancements relate solely to the transaction layer of the BBSW calculation waterfall.

ASX Benchmarks invites feedback from market participants and BBSW subscribers on the proposed methodology enhancements set out in this consultation paper. The consultation will be open from 27 July 2020 to 27 August 2020. Responses can be submitted to ASXBPricing@asx.com.au. 

ASX Benchmarks will publish a market notice to advise market participants and BBSW subscribers of the outcome of the consultation in September 2020. ASX proposes to implement the methodology changes in November 2020, subject to the feedback received from this consultation paper.

On 30 June 2020, ASX released its consultation paper on the CHESS Replacement Revised Implementation Timetable. The paper sets out key project activities and milestones including system development and testing, user testing, technical accreditation, operational readiness, and operating rule amendments. A copy of the media release can be found here.

The revised timetable has been produced to provide additional time for the ongoing impact of the COVID-19 pandemic on all stakeholders, accommodate functionality changes requested by users, and have a longer period for ASX and CHESS users to complete their respective development and readiness activities. The aggregate effect of these considerations produces a new go-live date of April 2022, 12 months beyond the original target go-live.

While no-one was predicting this significant increase in trading volumes that have occurred recently, it highlights the need to replace older systems across the industry with flexible, contemporary technology. This requires prioritisation by ASX and CHESS users, but also prudent planning given the impact of COVID-19 to ensure that CHESS is replaced both in a safe and timely manner.

Written submissions from CHESS users are requested by 28 July 2020.

On 22 May 2020, ASX released its response to consultation feedback received on the November 2019 CHESS Replacement Tranche 1 Rule Amendments Consultation Paper.

ASX received 12 written submissions in response to its consultation paper, seven of which were provided on a confidential basis. The submissions provided on a non-confidential basis are available at the links below:

• HSBC
• GBST
• Computershare
• ASA
• Chi-X

As announced in the media release on 25 March, ASX will begin consultation on a revised CHESS replacement implementation timeline in June 2020. This consultation will include information on the proposed timing for further consultation on the rule amendments.

On 26 February 2020, ASX released its response to submissions on ASX’s consultation paper proposing changes to the 3 and 10 Year Bond Futures Roll.

ASX received 36 written submissions in response to the consultation paper, all of which were provided on a confidential basis.

ASX intends to implement a reduction to the 3 and 10 Year Bond Futures minimum price increment during the week of the Roll. These changes and the target implementation date are outlined in the response paper.

21/02/2020

On 21 February 2020, ASX released a consultation paper on the second of three tranches of operating rule amendments required to facilitate the implementation of the new system that will replace CHESS. These relate to corporate actions, mFund and RTGS payment aspects for 'Day 1" implementation of CHESS Replacement system functionality. RTGS will support payments for corporate action involving entitlement acceptances as well as payments for bilateral demand settlement instructions (addressed in the tranche 1 rule amendments).

The consultation paper invites feedback from users and other stakeholders on the operation of the draft tranche 2 rule amendments, including any unintended consequences.

Written submissions are requested by Friday 3 April 2020.

8/01/2020

On 8 January 2020, ASX released a consultation paper outlining proposed changes to the ASX 24 Trade Cancellation Policy, specifically, 

• The removal of the No Cancellation Ranges (NCR) for all exchange traded options (ETOs), including the Single Session Options.
• Amendment to the Extreme Trade Range (ETR) for the 20 Year Bond Futures product. 
• ASX is also seeking feedback on the current cancellation ranges for all other ASX 24 products. 

ASX proposes, subject to feedback received through consultation, to:

• Remove the NCR for ETOs to provide greater flexibility for market participants. This is in line with Trading Participant feedback and will further align the ASX 24 and ASX Trade Operating Rules Procedures. 
• Amend the ETR range of the 20 Year Treasury Bond Futures from 50 basis points to 25 basis points to reduce the likelihood of an error trade causing a negative impact on a participant. The reduced ETR price level will provide a balance between allowing a reasonable range where erroneous trades will be cancelled whilst not unnecessarily impacting trading activity on days with high levels of market volatility.
• Assess whether the current cancellation ranges for all ASX 24 products are appropriate.

Written submissions are requested by Friday 28th February 2020. 

8/12/23

On 8 December 2023, ASX made a submission to Treasury’s review of changes to the continuous disclosure regime. While ASX considers it too soon to fully observe the impact of the 2021 Amendments, in the interests of ensuring the effectiveness of Australia’s continuous disclosure regime and the integrity and attractiveness of Australian markets, ASX submitted that the 2021 Amendments as they relate to regulator-initiated civil penalty proceedings should be repealed. Regulator action is the primary enforcement mechanism under the continuous disclosure regime and plays a critical role in incentivising robust disclosure practices by listed entities. The submission also sets out that the 2021 Amendments as they relate to private plaintiff-initiated civil penalty proceedings should remain, unless evidence becomes available that demonstrates a detrimental impact on the disclosure practices of entities. Requiring the demonstration of fault on the part of the disclosing entity for a successful private plaintiff-initiated action may reduce incentives for potential plaintiffs to pursue ‘opportunistic’ actions.

6/10/23

On 6 October 2023, ASX made a submission to Treasury’s review of the regulatory framework for managed investment schemes. The submission explained the interactions between the regulatory framework for managed investment schemes and the process for admission to ASX markets.

8/9/23

On 8 September 2023, ASX made a submission to Treasury’s consultation on exposure draft legislation for licensing exemptions for foreign financial service providers.

28/7/23

On 28 July 2023, ASX made a submission to Treasury’s second consultation on climate-related financial disclosure. The submission indicated support for implementation of mandatory climate-related financial reporting in Australia, noting that accurate and meaningful disclosures in this space will increase investor confidence and strengthen Australia’s position in the international financial landscape. The submission raised concerns with the ambitious timeline for implementation, as a rushed implementation could compromise the effectiveness of the regime.

3/3/23

On 3 March 2023, ASX made a submission to Treasury’s consultation on climate related financial disclosure. ASX’s submission is broadly supportive of the proposal, and submitted that disclosure obligations should not be limited to large listed companies and should apply to both large listed and large unlisted companies.

1/12/22

On 1 December 2022, ASX made a submission to the Australian Law Review Commission’s Review of the Legislative Framework for Corporations and Financial Services Regulation Interim Report B.

15/11/22

On 15 November 2022, ASX made a submission to Treasury’s review of the ASIC Industry Funding Model.